What this module covers
- What is Lido
- What the Community Staking Module (CSM) is
- How rewards, performance, and strikes work for ICS
- How to enter the protocol as a CSM node operator
Lido in the Ethereum staking ecosystem
Lido is a staking middleware that connects ETH holders seeking staking yield with independent node operators.
Lido:
- Does not run validators itself
- Relies on multiple staking modules (Currently Curated, Simple DVT and Community Staking)
- Applies different assumptions and mechanisms per module
What the Community Staking Module (CSM) is
CSM enables permissionless entry for independent operators into the Lido protocol.
As long as an operator:
- Provides the required bond
- Generate keys appropriately
- Meets performance requirements
They can participate in the protocol.
Rewards, performance, and strikes (for ICS)
Rewards
As an operator, rewards come from:
- Bond rewards: the bond is stETH (can be deposited as ETH as well) and accrues staking rewards
- Validator rewards: a commission on validator rewards
For Identified Community Stakers (ICS):
- 6% commission on the first 16 keys
- 3.5% commission on subsequent keys
Performance
For Identified Community Stakers (ICS):
- First 150 keys must be within 5% of the network average
- Subsequent keys must be within 3%
If performance falls below these thresholds:
- Affected keys become ineligible for validator rewards during that period
- Strikes may be issued
Performance is evaluated relative to the network average over a reporting frame (~28 days).
Strikes
- Are issued per underperforming key
- Last 6 months
- At 4 active strikes, the protocol can force an exit
Forced exits incur a penalty to cover the cost of processing the exit.
Execute this step
If you don’t have ETH on Hoodi for the bond please send a message to the group or DM enti
You are now ready to formally enter the Lido protocol as a CSM node operator.
Follow the official instructions here
In this step, you will:
- Create a node operator
- Upload your validator deposit data together with the bond
Once completed, validator activation depends on network conditions.
Read more here
- Lido documentation https://docs.lido.fi/
- Community Staking Module setup https://docs.lido.fi/run-on-lido/csm/
End of the module
Before moving on, you should be able to answer: